Occidental Life Ins. Co. v. Eiler

• Decision Date: 07 March 1942
• Docket Number: No. 11990.,11990.
• Parties: OCCIDENTAL LIFE INS. CO. v. EILER.
• Court: U.S. Court of Appeals — Eighth Circuit

125 F.2d 229 (1942)

OCCIDENTAL LIFE INS. CO. v. EILER.

No. 11990.

Circuit Court of Appeals, Eighth Circuit.

January 27, 1942.

Rehearing Denied March 7, 1942.

James C. Jones, Jr., of St. Louis, Mo. (James C. Jones, W. A. Welker, and Jones, Hocker, Gladney & Grand, all of St. Louis, Mo., on the brief), for appellant.

Frank L. Ramacciotti, of St. Louis, Mo. (Raymond E. LaDriere, of St. Louis, Mo., on the brief), for appellee.

Before GARDNER, SANBORN, and WOODROUGH, Circuit Judges.

Rehearing Denied March 7, 1942. See 126 F.2d 429.

WOODROUGH, Circuit Judge.

This suit was brought by Sophie Eiler, the beneficiary named in a double indemnity insurance policy issued to her husband in his lifetime which was in full force and effect at the time of his death. The defendant insurance company had reinsured and assumed the contract of the original insurer and stood in its shoes as to liability. It had paid the amount of the life insurance benefit in the sum of $5,000, but had paid only $1,500 of the $5,000 accident insurance, and the suit was to recover the remaining $3,500 under the accident insurance provisions of the policy and for attorney's fee and damages for vexatious refusal to pay. The plaintiff recovered judgment upon the trial before the court without a jury for the amount sued for, with interest and costs, and for $350 damages and $1,000 attorney's fee, and the insurance company appeals.

Statement.

The policy sued on provided that if the plaintiff's husband died as the result of injury incurred through violent, external and accidental means, the insurer would pay her $5,000 in addition to the $5,000 agreed to be paid upon his death, and the proof was that he committed suicide while insane by shooting himself with a rifle. The plaintiff relied upon the controlling Missouri law that the suicide by shooting while insane was an accidental death incurred by violent and external means within the meaning of the policy. The defendant insurance company alleged in its answer that after the death of the insured a dispute arose between itself and the plaintiff as to whether or not the death of the insured was the result of an accidental bodily injury within the meaning of the policy and as to whether the plaintiff was entitled to the additional $5,000 under the accidental death benefit of the policy, and that it had offered and plaintiff had agreed to accept $1,500 in full settlement and discharge of all claim under the double indemnity or accidental benefit of the policy, and that in consideration of the payment to her of $1,500 she had executed a written release in full of all her claims. The release signed by her was set up in the answer and it was alleged that the payment constituted accord and satisfaction and that the release was a bar to the action.

In her reply to the answer the plaintiff denied that any dispute had ever arisen or existed between herself and the insurance company as to whether the death of her husband was the result of accidental bodily injury within the meaning of the policy, or as to whether the plaintiff was entitled to the additional $5,000 under the double indemnity provisions, or that she had agreed to accept $1,500 in full settlement and discharge of her claims, or that she had executed and delivered the alleged release, or that the payment of the $1,500 constituted accord and satisfaction. Although she admitted signing the paper and receiving the money, she denied that the money was accepted or the instrument signed in settlement of her claim. She alleged that, "after the death of her husband, the insured, she called at the office of the Guaranty Life Insurance Company, and defendant, Occidental Life Insurance Company, its successor, and there talked to their representative and agent in charge of said office, and advised him of the death of insured, and made proof thereof; that, at said time, and repeatedly thereafter, she told said representative and agent of said Guaranty Life Insurance Company, and defendant, Occidental Life Insurance Company, its successor, that insured was insane at the time of his death, and had been insane for several years prior thereto; that at said time plaintiff furnished defendant and said agent and representative with a coroner's certificate, which stated on its face, that the insured was insane at the time of his death, and had been for two years or more prior thereto; that at said time plaintiff also stated to defendant and said representative and agent that the insured had been confined to, and under treatment in, hospitals for insanity, and that doctors had recommended and advised plaintiff that the insured be permanently confined to a hospital for the insane because of his said condition of insanity, which was incurable, and she demanded payment in full of said sum of $5,000 due her under the accidental death or double indemnity benefit of said policy, but that defendant and said representative and agent stated to her that the company did not pay double indemnity under such circumstances.

"That thereafter she again called upon said representative and agent of said Guaranty Life Insurance Company, and defendant, Occidental Life Insurance Company, its successor, and again stated to them the facts and circumstances of insured's death, as aforesaid, and again demanded payment of the $5,000 due her under the double indemnity or accidental death benefit of said policy, but that said representative and agent and defendant again informed her that the company did not pay double indemnity under such circumstances; that said representative and agent further stated to plaintiff that the Guaranty Life Insurance Company was being taken over and purchased by the defendant, Occidental Life Insurance Company, and that by reason thereof, said Guaranty Life Insurance Company would pay plaintiff the sum of $1,500; that, if plaintiff did not accept said sum of $1,500, she would receive nothing because the said Guaranty Life Insurance Company was going out of business; that said representations of defendant and its said representative and agent were material, false and untrue; that plaintiff relied on said false statements and representations, and being unable to ascertain the true facts with respect thereto, was misled thereby; that said false representations and statements were such as to mislead a person of ordinary prudence, and particularly plaintiff, and were intended to mislead and defraud plaintiff; that plaintiff, in reliance upon said false and untrue representations and statements of defendant and said agent and representative, signed a receipt for payment of the sum of $1,500, and accepted payment of said amount on account, but demanded, continued to demand, and still demands payment of the balance of said $1,500 due her under said accidental death or double indemnity benefit of said policy; that plaintiff never understood that said sum of $1,500 received by her was in full satisfaction and discharge of said policy; that she had no intention of acknowledging satisfaction of said policy, and never did acknowledge satisfaction of same; that said receipt was signed by her in ignorance of the fact that it purported to be a release, as alleged by the defendant, and because she was directed to do so by defendant and said representative and agent; that she never read or knew the purport of what she signed until the defendant set up in its answer a copy of an instrument purporting to be a release, and that she does not know whether or not said instrument is a true copy of the receipt filed by her; that, by reason of the aforesaid, said representative and agent of said Guaranty Life Insurance Company, and defendant, Occidental Life Insurance Company, its successor, perpetrated a fraud on plaintiff.

"That at the time of the death of the insured, and continuously for a period of about two and one-half years prior thereto, said insured had been insane; that during said period he had been under the care of doctors and physicians specializing in the care of insane persons, and had been confined to hospitals and other institutions for the care of insane persons; that during said period said insured was suffering from an incurable condition of insanity; that he had, on several occasions, threatened suicide, and that he died as a direct result of shooting himself with a rifle or gun while insane.

"That it is provided by the laws of Missouri, Revised Statutes, 1929, Section 5740 Rev.St.1939, § 5851, as follows: `In all suits upon policies of insurance on life hereafter issued by any company doing business in this state, to a citizen of this state, it shall be no defense that the insured committed suicide, unless it shall be shown to the satisfaction of the court or jury trying the cause, that the insured contemplated suicide at the time he made his application for the policy, and any stipulation in the policy to the contrary shall be void.' Which statute was in full force and effect at the time of the death of the insured, and at the date of the issuance of said policy, as well as at all times herein mentioned.

"That it is also provided by the laws of the State of Missouri, as declared by its highest courts, in substance as follows:

"1. `That so far as a provision of an accident policy attempts to limit, or purports to limit recovery of the face of the policy in cases of suicide, while insane, such provision is void as conflicting with Revised Statutes of Missouri, 1929, Section 5740.'

"2. `That payment of a part of the indebtedness unquestionably due on a liquidated amount, is no consideration for a release of the balance of the indebtedness, and payment of a part upon a dispute raised in bad faith, and without any reasonable ground therefor in law or in fact, will avail nothing as a consideration for the release of the balance.'

"3. `That the amount named in the face of a policy of insurance, upon the death of the insured, becomes a liquidated or fixed amount,...